Ethiopia grants 40 foreign firms licenses in retail, export, and wholesale, signaling a major shift in its economic liberalization strategy.
Ethiopia Opens Trade Sector, Issues 40 New Foreign Licenses
Addis Ababa, Ethiopia – In a bold move to accelerate economic liberalization, Ethiopia has issued 40 investment permits to foreign companies in previously restricted sectors such as retail, wholesale, export, and import, marking a significant shift in trade policy.
The announcement came during the Invest in Ethiopia 2025 High-Level Business Forum, where Zeleke Temesgen, Head of the Ethiopian Investment Commission (EIC), confirmed that the new permits followed months of regulatory groundwork aimed at unlocking foreign participation in sectors historically reserved for domestic firms.
“Since the directive was approved, 40 foreign businesses have been licensed to operate in what were previously prohibited sectors,” Zeleke told reporters. He did not disclose the names or capital commitments of the firms.
Under a newly enacted directive, foreign investors can now legally enter segments once off-limits or heavily restricted. These include:
- Raw coffee and khat exports
- Pulses, oilseeds, hides and skins, livestock, and forest products
- Poultry farming and electric vehicle trade
However, strategic imports such as fertilizer and petroleum remain under state monopoly control.
Temesgen noted that the 40 newly licensed firms include those in the electric vehicle, edible oil, khat, livestock, and paraffin oil sectors—part of a diversified play on Ethiopia’s evolving industrial ecosystem.
The government has tightened compliance for foreign companies entering Ethiopia’s market for the first time. Among the key requirements:
- Export contract minimum: USD 500,000
- Transparent supply chains for firms relying on local/imported inputs
- Mandatory documentation of production processes
These measures are meant to curb speculative licensing and improve accountability in a market newly opened to foreign capital.
“[Our goal is] not just to open doors, but to ensure investors contribute meaningfully,” Zeleke emphasized.
When questioned about Ethiopia’s security landscape, Zeleke acknowledged that “real challenges” persist in some regions. However, he underscored that the capital Addis Ababa and key trade corridors remain stable.
“There’s a difference between actual incidents and the perception that there is no safety in the capital. That perception is inaccurate and must be corrected.”
The government is rolling out public diplomacy campaigns to restore investor confidence and counter what it sees as an exaggerated security narrative.
As part of its reform push, the government has revised over 85 legacy investment laws, many dating back to the 1970s and 1980s. This legal overhaul is intended to:
- Improve predictability for investors
- Simplify licensing and registration
- Align Ethiopia with global ease of doing business standards
The EIC said that these reforms, paired with digitalized services, will significantly reduce bureaucratic delays and investor uncertainty.
In the 2023/24 fiscal year, Ethiopia attracted USD 3.92 billion in foreign direct investment (FDI). According to the EIC:
- China remains the top source with 4,510 active projects
- Emerging investors include countries from Europe, the Gulf, and East Asia
“We are keen to diversify our investment partners,” Temesgen said, noting that overdependence on any one country poses geopolitical and economic risks.
The 40 foreign licenses represent a critical test of Ethiopia’s commitment to economic liberalization under its broader transformation agenda. While the move has been welcomed by the private sector, success hinges on several factors:
- Maintaining regulatory continuity
- Improving infrastructure and logistics
- Ensuring security and legal certainty
“We lost significant opportunities by locking out foreign retail and wholesale players,” Temesgen concluded. “Now, we’re beginning to see the benefits of opening up.”
